Australia is transitioning toward services driven economic growth and away from mining, with the central bank keeping interest rates at a record low for more than 18 months to support the transition. While businesses have boosted investment and hiring, including a record 300,000 full-time jobs last year, unemployment is falling only slowly and inflation just creeping higher as spare capacity remains in the economy.

Households remain mired in record-high debt and weak wage growth that™s constrained spending. The government has stepped in to provide some support to demand with large infrastructure projects to help eastern states cope with a surge in population growth.

Australia's central bank says it expects growth to accelerate this year from last, which should help soak up spare capacity. Still, Reserve Bank of Australia Governor Philip Lowe said earlier on Wednesday he sees no strong case for a rate move in the near term, adding that progress in the jobless rate and inflation will occur œonly gradually.

Australia™s central bank highlighted a better global backdrop and faster growth at home, while reiterating inflation™s advance and unemployment™s decline would be only gradual, in minutes of this month™s policy meeting.
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